Common myths about appraising
By law, an appraiser needs to be state-licensed to offer appraisals for federally-supported purchases. The law gives you the right to acquire a copy of your completed appraisal from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value will be equivocal to the assessed value of the property.
Fact: While most states back the suggestion that assessed value is equal to estimated market value, this often is not the case. Usually when interior remodeling has been done and the assessor is has not investigated the improvement or properties in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: The opinion of value of a property will change depending upon if the appraisal is provided for the buyer or the seller.
Fact: There is no vested interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: Market value will approximate replacement cost.
Fact: The way market value is derived is based on what a buyer would be willing to pay a willing seller for a property without being under influence from any external party to purchase or sell. The dollar amount needed to reconstruct a home is what forms the replacement cost.
Myth: Appraisers use a calculation, like a certain price per square foot, to come to the worth of a property.
Fact: An appraisal report is an assertion of data based on the home's size, location, proximity to certain facilities, the condition of the home and the worth of recent comparable sales. You can depend on Belles Appraisal Service, LLC's appraisers to be honest in assessing this data.
Myth: As properties appreciate by a specific percentage - in a strong economy - the properties in proximity are expected to increase by the same amount.
Fact: Price increase of a specific house has to be concluded on an individualized basis, factoring in data on comparable houses and other relevant considerations. It doesn't matter if the economy is on the rise or declining.
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Myth: Just examining what the house looks like on its exterior gives a good idea of its worth.
Fact: Home value is determined by a number of variables, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just inspecting the house from the outside.
Myth: Since you're the one paying for the appraisal when applying for the loan to purchase or refinance real estate, you own the produced appraisal report.
Fact: The report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal. Under the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given it by their lending agency.
Myth: There's no need for home buyers to even care about what the report contains so long as their lending company is fine with the contents therein.
Fact: It is very important for home buyers to check over a copy of their report so that they can verify the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an excellent record for future reference, filled with useful and often-revealing data - including the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.
Myth: The only reason someone would order an appraisal is if a house needs its price assessed in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to provide a multitude of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Fact: Appraisal reports are definitely not the same as a home inspection report. The task of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. House inspectors will compose a report that will express the condition of the property and its major components and possible damage.